Cladding, Professional Indemnity Insurance and Building Certifiers

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Cladding, Professional Indemnity Insurance and Building Certifiers

Our increasing knowledge of the risks posed by unsafe cladding products has given rise to the continued growth of public interest and awareness of the issue. This includes a refusal by some insurance providers to renew professional indemnity insurance policies. At least without significant exclusions relating to cladding claims.

In the past year alone, media reporting has grown significantly regarding cladding related stories. Mirroring your concerns as to what future measures and solutions government and industry bodies are discussing.

Understandably, this information, the surrounding events and discussion have caused significant concern. About the future of the issue, the legislative landscape and rectifying buildings and structures found to contain unsafe cladding.

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Building certifiers and professional indemnity insurance

Certifiers and building practitioners face their challenges also. The ability to possess mandatory insurance has since become a major concern, too. Building certifiers must meet certain requirements to gain a license to practice.

The response to rising concerns by insurance providers has, for the most part, been a refusal to provide or renew public indemnity insurance policies. At least without significant exclusions or special conditions relating to cladding related claims. Or to mandate otherwise significant price increases that will flow onto the construction industry.

Industry body AIBS responded to the issue on 11 June, discussing industry and government concerns of a pending shortage of qualified practitioners. Many practitioners may have to close their businesses due to their inability to obtain coverage.

Major concerns highlighted in the document have cautioned the Government against ‘kneejerk stop-gap measures’. AIBS maintain the Government’s position and the issue itself have been well known and documented, stating ‘they have been warned about [this] for many years.’

Hendry and professional indemnity insurance

We are proud to confirm that as a result of our long-standing record of quality and professionalism, we are one of a limited number of organisations in Australia that have successfully renewed our professional indemnity insurance. We’ve renewed significantly above the minimum required levels, with no exclusions or special conditions. As a result, we have maintained the ability of our Building Certifiers and Surveyors to continue practicing uninhibited across our national offices.

We need to communicate this, as we understand the relative uncertainty in the industry. We don’t wish the general public to present the matter as unclear moving forward.

What defines a practitioner as insurable? How do you identify which supplier to use?

First and foremost, a supplier of building certification services must demonstrate adherence to stringent quality measures. Additionally, they must demonstrate the uncompromised application of all relevant and necessary regulations and standards.

The track record of a supplier’s work and insurance position is likely to cause industry migration. Migration to organisations and suppliers who have a minimal level of risk across their portfolio and work history. Through our internal practices, Hendry has upheld our history of maintaining a high level of insurance cover since our founding over 36 years ago.

Practitioners who can renew their professional indemnity insurance without exclusion or special conditions, as we have, can demonstrate a consistent quality of practice. These practitioners are supported by an unambiguous business approach that anticipates and avoids risk.

The greater impact on building certifiers and professional indemnity insurance

In statements released earlier this week, Queensland Minister for Housing and Public Works, Mr Mick De Brenni, has further highlighted concerns over Building Certifiers ability to obtain or renew professional indemnity insurance.

Mr De Brenni reinforced this sentiment, commenting, ‘If there is not certainty soon buildings will not be occupied and construction will come to a standstill.’

An adverse consequence of this increased restriction on insurance for building certifiers has seen insurance costs rise. The move was labelled as ‘massive and unaffordable’ by the Australian Institute of Building Surveyors.

This has caused conflict over the availability of coverage that satisfies the necessary criteria for the registration of Building Certifiers. Particularly in Queensland, New South Wales and Victoria where ‘the last remaining provider of exclusion-free insurance policies will no longer guarantee coverage from 2 July 2019.’

AIBS also claims that the few insurance providers, newer to the market, who were ‘sourced to offer exclusion-free policies’ have since ‘exited the market’. They claim authorities in all jurisdictions knew about the issue from June last year.

Our experts can address your concerns across building compliance and certification. Or any questions you may have surrounding external cladding. We have decades of experience in managing issues across the built-form.

Send us an email at info@hendry.com.au or call 1800 875 371. Let’s discuss your needs.

Questions about external cladding?

Our experts can address your concerns across building compliance and certification or any questions you may have.

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